The Quoddy Tides

Eastport, Maine

2010 Sep 10

Calais LNG granted another delay
to find financial backer

by Edward French

Calais LNG has been granted another delay in order to find a financial backer for the project C this time until December 1. Following a September 15 conference involving Calais LNG and intervenors in the proceedings before the Board of Environmental Protection (BEP), board Chair Susan Lessard approved another postponement of the board's hearings on the project for two and a half months. The hearings, which were scheduled in mid-July, will have been delayed a total of four and a half months.

In a letter to Calais LNG attorney David Van Slyke, Lessard wrote, "In light of the significance of this project in terms of scope, complexity and cost, as well as the time spent and expenses incurred by the parties and the department thus far in the processing of the pending applications, it is reasonable to allow the applicant the requested time to complete re-financing negotiations and provide the information required by the department without withdrawal of the applications." Calais LNG had indicated that mid-October was a reasonable estimate of the time needed to secure financial backers, with an additional six weeks beyond that date needed to supply the technical information previously requested by the Department of Environmental Protection (DEP). Lessard added that the company "shall notify the board as soon as it secures new financing for the project or if it suspends efforts to secure financing."

Two days before the September 15 conference, Calais LNG had requested that the conference be postponed a month, since it was not "possible to predict precisely when the discussions might be concluded such that a new financial partner can be identified to the board and the parties," Van Slyke had written in a letter to Lessard. He indicated that Calais LNG is discussing financial arrangements with two possible financial partners and that "one of those entities has access to a very significant natural gas supply and is currently applying a vertically integrated business approach (gas supply, liquefaction capacity, shipping capacity and receiving terminal capacity) to the worldwide LNG market. The other entity has considerable expertise in the global commodity markets and a keen interest in energy sources that promote clean energy and sustainable alternative energy sources as well as natural gas. The Calais LNG project, being located in New England, would add a significant component to either enterprise."

The company's request to postpone the conference was opposed by some of the intervenors who oppose the project. Sean Mahoney, vice president of the Conservation Law Foundation, wrote to Lessard, "Yet once again, Calais LNG chose to advise the chair of this non-development at the last minute and request another postponement. These serial last-minute postponement requests reveal an utter lack of respect for the board's process and the interests of the other parties to this proceeding."

Mahoney continued, "Calais LNG chose to fast track this application. It then chose to seek to postpone this proceeding when it failed to provide adequate responses to issues with its applications identified by the DEP and other state agencies and again when its financial backing dried up. It unilaterally chose a new deadline of September 11, 2010, to find new financing and has failed to meet that deadline."

Lessard ended up deciding to hold the conference as scheduled. It had originally been scheduled for September 8 but was delayed to September 15 because Calais LNG had been granted an extension until September 11 to locate a new financial backer. Calais LNG had first requested postponement of the BEP hearings on July 13, before the hearings were set to begin. A week later, the company announced that its financial backer, GS Power Holdings, a subsidiary of Goldman Sachs, was selling its interest, after investing $24 million in the project, which is estimated will cost between $900 million and $1 billion.


© 2010 The Quoddy Tides
Eastport, Maine
Article republished on Save Passamaquoddy Bay website with permission.